People on Sheares Bridge in front of the two durians bidding farewell to LKY. It was a very wet day.

7/04/2009

Properties are up for grabs

Melvin Chua, a businessman, sold his 4rm flat in Jalan Membina for $550K and bought a 5rm for $638K. He only needs to top up $88K for a bigger flat. No sweat for a successful businessman. Sales of HDB flats have surged due to demand from young couples, upgraders, downgraders and PRs. It looks like the prices of properties will continue to rise, fuelled by demands from people who can afford them. The prices must therefore be reasonable.
In the facing page of the ST was an article by Fiona Chan asking whether the property rally is sustainable? I can simply answer that with an affirmative yes. The pool of flats built by HDB is stable, no new flats are being built unless they have been booked in advance. This is a new concept compare to the old when flats were built ahead of demand leading to oversupply at times. And if the locals are not there buying, the huge influx of PRs and new citizens will be there to make up for the slack. We need them to shore up the CPF scheme.
Anyway, what is $500k or $600k? Jet Li bought a bungalow for $14m or $16m. And in the Life page there is a huge bungalow of 7,500 sq ft sitting on 16,000 sq ft of land or the equivalent of 15 5rm HDB flats. The value could be more than Jet Li's. The PR hedge fund manager owner did not disclose the price but it is a handsome house in the choicest corner of Singapore.
The rich are living very well here. And so are the average Singaporeans in their affordable 5rm flats. Those who cannot afford it, the losers, need not fear. The govt will look into their needs and build more affordable 2 and 3 rm flats to suit their pockets. And for the real losers, there will be more rental flat built specially just for them.
Actually we should not be wasting our time talking about the losers. They make their lives that way, lazy, stupid, and failed to seize the golden opportunities to make more money to buy bigger and affordable flats or landed properties.
Shall we say good riddance?

15 comments:

I am downgrading to a 1 room rental flat and is in the process of selling my 3 room HDB. Response has been so good that my property agent is giving me a discount on selling it because as he puts it, "not much selling is required" and response was so good that he had to pre-qualify buyers before allowing them to see my flat. Can you imagine it? I keep telling him that I am not selling a pent house at The Sail!

Contrary to what others might say, we, the one roomers are not down and out. At least, we don't have property tax to worry about.

Whoopee, I am rich man! And we in the 1 room rental flats gets the most utility rebates and when the good times come back, not that it ever went away, we will get more govt. handouts. Besides, I heard that most charity workers goes to 1 roomers to source for someone to "charitise" so I can look forward to more goodies and freebies from kind souls.

I want to record a big "thank you" to the PRs who helped to return my capital many times over. Without them, the HDB resale market would be "dead".

I guess S'poeans can kiss their CPF funds goodbye after all these asset enhancement. My main grouse is why are 45 yrs properties still valued at current valuations? This property fervour is a very good system of keeping funds within the country, provided it do not collapse like a house of cards. It is not easy to downgrade, takes a bold approach in thinking and perception. The contrarian theory to any investment usually works, just takes a longer time frame.

The assumption is the property market will never collapse like a house of cards. The confidence is so sky high, it is just not possible to end with that scenario in little red dot.

Hmmm, like Wally, I am thinking of downgrading to a rental flat, if possible. You know, they have made rental flats very difficult to qualify for, and you have to wait for a long long time, maybe years. I wonder whether I can last that long.

The above is of course another of their ploy to keep the HDB market tight, so that HDB resale prices remain high, because if you are ineligible for rental flats, you have to pay what the market dictates.

Of course they will tell you some grandfather's story about rich people going for rental flats, so they can built at their own sweet pace.

hi wally, one day someone is going tell you that you are abusive the system, taking advantage of the syttem. rich people cannot live in rental flats or smaller flats, just like hospital wards. they are heavily subsidised.

they will soon introduce means testing for those who want to downgrade.

as for the valuation of properties, some will think that it is ok to pay that kind of money for a 45 year flat. but like it or not, the lease will work its way to zero and the value too will be zero. after a few years of inflation, it will become a depreciating asset. the COE must expire one day.

It is my honest opinion that government does not steer or manipulate property prices. The market had opened itself to buyers from all over the world - that is the true spirit of a free economy. example rich Chinese from mainland will buy up lots it they are for sale. .. that the true spirit of a free economy.

Richer SIN are also buying properties in Bangkok, Kulau Lumpur & Jakarta, the country local there are also complaining.. but in true spirit of a free economy - this is what happens. One sells to the highest bidder.

I believe our government did not interfer in property prices in the private sector market, invarialby private sector market do create a demand for public housing. Were there so many PR and putting such pressures on public housing projects?

Some people are plain STUPID. They don't understand the implication of a 99 year lease. When you upgrade from a leasehold to FREEHOLD, that's true upgrading and worth every penny.Upgrading a lease to another lease?What happen at the end of 99 year lease? The government takes back your property free unless you sell it before the end of the lease. But, who is stupid enough to buy when your lease is ending. Meanwhile, dumb and dumber continue to pay exorbitantly for a 99 year lease.

Wally, I hope you are just kidding. You do not sound poor enough for a one room rental flat. Give the really down and out a chance.

HDB has already got checks to make sure only those who need it can get those flats. Before you sell your three room, if I can remember correctly, those who apply must not have sold their homes within one year of application and there is an income and family nucleus requirement.

I have thought of selling my fully paid flat and downgrade like you, but the security issues in those rental blocks and HDB requirements are too prohibitive. Further, my conscience does not allow me to deprive the truly needy by making the queue and waiting times much longer for them.

in most of my posts, my position is moderation. allowing a system to go fully commercial, fully free enterprise, or at the other end, fully state control, will lead to disasters. what is needed is to moderate the extremes, make adjustments, to prevent extremes that will lead to extreme measures or consequences. we do not want to end up like the concluding chapters of The Animal Farm.

as we encourage free enterprise, as a govt, there is still the losers to look after. if the govt does not manage this, the whole country can be bought by the rich and the foreigners and leaving nothing to them.

there are govt interventions in the economy, like it or not. we see the govt's fingers everywhere. what i would like to see is for the free economy to run as freely as possible, but some parts must still be managed. the private housing can go free, but public housing is a different issue.

even for private housing, we must not forget that we just have those few pieces of land. it does not take much to buy up everything. and we cannot sell off everything to the highest bidder. then we may unconsciously sell off the whole country.

the people elected the govt to run the country that the govt thinks is good for the people. this is what the govt thinks is good for the people even if the people disagree. this is the contradiction in a democratic system.

I hear that not only mainland Chinese are buying. Ppl from far-away places as far as Scandinavia countries are buying homes in Singapore. We are at crossroads of this Asia Tsumani and it is expected many well-heeded will buy properties here given it well run infrastructres. I also think those who are stationed in India comes here to get R&R before going back due to India poor infrastructures means they also buy homes for R&R. The demand will keep going up as long as Taiwan,China, India & HK prosper.

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